The Church of Jesus Christ of Latter-day Saints announced Wednesday it has reached an agreement to purchase Crossroads Plaza.
The "agreement in principle" includes the shopping mall and the adjoining office tower, the church said in a statement. Financial terms were not disclosed, though the church indicated the funds would be paid from investment reserves.
The transaction is expected to be complete in the next several weeks, pending finalization of terms with the mall operators.
The church has long owned the majority of land upon which the mall stands, which it leased to Maryland-based mall operator Foulger Pratt. It also owns, through its real estate arm, the adjacent ZCMI Center mall. The two have shared marketing and promotional operations for several years.
LDS Church Presiding Bishop H. David Burton told the Deseret News on Wednesday that Foulger Pratt approached the church some time ago, suggesting it might be interested in purchasing Pratt's interest in the mall.
"As they (Foulger Pratt) have tried to negotiate with Nordstrom and other potential tenants, they have not been as successful as they would have liked," Burton said. "They suggested that perhaps their interest could be made available and that we might consider it."
Representatives from Foulger Pratt did not immediately respond to requests for interviews.
When asked about the future of Crossroads, Burton said it is not likely that the church will make any significant changes in the mall's operations. It will continue to work with ZCMI Center, he said, which hopefully will result in "synergistic approaches to leverage our interest between those two blocks."
Burton also said it is not likely that Crossroads will close on Sundays, as ZCMI Center does, at least in the short term.
"We haven't even crossed that bridge," Burton said. "There are tenants that have leases there that need to be honored. Nordstrom, as an example, will be there at least until 2005 and hopefully longer than that. I would not foresee that there would be many operational changes in the short term."
What is possible, Burton said, is a transformation to a mixed-use retail project, blending retail with residences or office space.
"Most urban areas are looking at multiple-use kinds of things, not just retail," he said. "But the kind and variety of retail and other elements has yet to be determined."
Regarding Nordstrom, Burton expressed his hope that the high-end department store would consider remaining at the mall. Nordstrom officials were not available for comment by press time but have stated their desire to move to The Gateway, citing parking, management, design and tenant concerns.
The church has not approached Nordstrom yet, Burton said, but looked forward with some optimism to future discussions.
"Nordstrom continues to be an anchor tenant at Crossroads," he said. "They have indicated that they would like the barriers removed allowing them to move to The Gateway. We have no definitive information about what their plans may be. But we hope that Nordstrom would consider staying where they are.
"We believe that the best interest of the city would be for Nordstrom to remain on Main Street. But that is yet to be determined. Obviously, we'd love to have discussions with them, to understand what their needs might be. Hopefully, the new ownership will bring new perspective."
Bob Farrington, executive director of the Downtown Alliance, called the acquisition "interesting" although not a complete surprise.
"They certainly have the resources and the position to do the things that are required to keep the mall, or even whatever the transformation might be, a viable and positive asset for the city."
Salt Lake City Mayor Rocky Anderson applauded the acquisition. However, along with the praise, Anderson revealed that his desire to keep Nordstrom at the Main Street mall has waned. Now the mayor says he would be willing to support a Nordstrom move to The Gateway.
"My preference would be that if something could be worked out to keep Nordstrom on Main Street. Depending on the church's plans and taking into account the absence of a proposal by the Crossroads mall owner for several months, it may very well be that the only alternative is for Nordstrom to move to The Gateway," Anderson said Wednesday.
Anderson, who previously said he would rather have Nordstrom leave Salt Lake City than to see the department store move from Main Street to The Gateway, said circumstances have changed. Foulger Pratt hadn't made a legitimate offer to keep Nordstrom, Anderson said. Because no decent offer came, Anderson said that, out of fairness to Nordstrom, he was forced to reconsider his staunch stand that Nordstrom stay on Main Street or leave town.
"Actually, the situation has changed," Anderson said. "While we were remaining very steadfast in our position, the Crossroads mall owners were not presenting Nordstrom with any proposals."
While City Council Chairman Carlton Christensen agrees that Foulger Pratt was negligent in their dealings with Nordstrom, he said he is hopeful the church can persuade the retailer to stay on Main Street.
"It was very frustrating to us as a council," he said. "The principal that we stood by was correct, but that ownership wasn't capable or willing to do the kind of things they needed to do to keep Nordstrom and other stores there."
Christensen, who works for the LDS Church, said the church plans to make a "market rate offer" to keep Nordstrom at Crossroads.
He said he doesn't think the council will change its collective mind and allow Nordstrom to open up shop at The Gateway. The council would have to vote to change some zoning rules in order to facilitate a Nordstrom move to The Gateway.
Dave Buhler, former City Council chairman, said one of the challenges of keeping Nordstrom at the mall was the retailer's level of dissatisfaction with Foulger Pratt. With a new owner, Buhler hopes Nordstrom can be persuaded to stay.
When asked about whether Salt Lake City residents should be concerned about the church's acquisition of the mall, in light of recent high-profile purchases in the downtown area, Burton maintained the church has an interest and an obligation to ensure the safety and vitality of that downtown corridor. That's a win for the church and for the city, he said.
"Because of their close proximity to the church headquarters and the temple, the church has always been interested in those two blocks," Burton said. "This is paving the way for those blocks to be redeveloped. I don't think we ought to jump to the conclusion that the church will necessarily do the redevelopment itself. We could look for others to come forward and redevelop it, subject to the land lease in place. But there's a lot to get through before anything can be said or done there."
Anderson, Christensen and Buhler don't think the purchase should be seen as the LDS Church trying to take over downtown Salt Lake City. The church has proven itself a good corporate citizen, they said, citing land leases to the Salt Palace Convention Center and Abravanel Hall at virtually no cost.
Further, Christensen noted that the LDS Church usually doesn't ask the city for redevelopment loans, so the city will be able to see the area redeveloped while saving its low-interest loans for other parts of downtown.
"We are extremely excited about the prospect of The the Church of Jesus Christ of Latter-day Saints purchasing Crossroads mall," Anderson said. "This bodes very well not only for that block but also the block to the east where the ZCMI Mall is located. . . . We will be fully supportive of the church's efforts to revitalize this important part of downtown."
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